Beyond the Basics: Creating Personalized Journeys
This article explains the Personalization Maturity Model and guides you on getting started with personalized products.
Personalization is a big deal for companies, and this is not something new. Businesses are spending more on it because it's the key to standing out in the competitive business world. This way of doing things not only boosts important business numbers but also makes users happy and keeps them coming back for more.
69% of businesses are increasing their investment in personalization (Segment - 2023)
By the end of 2026, personalization in the software market is expected to grow from $620 million to $2.2 billion,
Personalization Maturity Model
To understand how to incorporate it into your product, look at the five stages of Personalization Maturity. Each stage brings us closer to using the full power of personalization, from collecting basic data to personalized, one-to-one interactions. The initial stage in the image represents the foundational work for later stages, becoming more personalized and real-time as you progress. Examples are provided below.
Generic: One to All
In this phase, all users receive uniform product content and features—a one-size-fits-all approach. It's particularly effective for basic data collection, understanding user behavior, and tracking their actions. Begin by observing user interactions and gathering data on their preferences, such as the app sections they frequent and features they use regularly. This data forms the foundation for future personalization phases. Focus on identifying key metrics, track navigation, actions, visualizations, and store the data.
Macro Segmentation: One to Many
At this stage, start categorizing your app users based on shared characteristics and establish rules to organize the product. For example, tailor content for first-time users differently from those who have already made a purchase, making the app experience more specific. This represents the initial accomplishments towards personalization, offering varied features and content to user groups using a standardized approach. Product Managers should collaborate with the Data and Tech teams to identify user groups based on data collected in the Initial Stage. Once rules and segments are established, work with the Design and Tech teams to incorporate personalized content and features for each group, enhancing the app's relevance for different users.
Persona: One to Some
In this phase, personalization becomes a responsive approach, targeting personas within demographic groups or customer segments based on defined behavior patterns. With sufficient user data, you can create clusters based on behavior patterns and customer characteristics. Personalization is based on users' actions in the app and the information they provide, such as in-app surveys, trivia, and challenges. The personalization of the product becomes more sophisticated. For instance, different users may see unique on-site search results and product suggestions. This stage involves more touchpoints in the product and customization of content for personalized experiences. Product managers should collaborate with the Design team to add persona-driven content and features for a more personalized app experience. Gather user feedback and make improvements based on their responses.
Micro Behavioral Segmentation: One to Few
Micro-segmentation elevates personalization by forming highly detailed groups with specific user behaviors. This approach enables the delivery of precisely targeted content and recommendations. During this phase, we move from general descriptions of ideal customers to a detailed examination of specific behaviors in a smaller part of the overall audience. Product Managers play a crucial role in this process by collaborating with the Data team to define and refine strategies using behavioral data and predictive analytics. Additionally, they engage with the Tech team to implement near-real-time adjustments to content and offer dynamic recommendations, enhancing the overall personalized user experience.
Hyper-Personalized Stage: One to One
In this stage, your app offers individual journeys for each user, recognizing their intent and past interactions, and leveraging AI-driven algorithms and big data. Real-time product recommendations, personalized discounts, and tailored content create a unique, personalized experience for each user. Product Managers should collaborate with the Data team to develop and deploy real-time personalization algorithms. Implement features such as dynamic content adjustment, personalized notifications, and in-app recommendations to offer an experience according to the user's unique needs and preferences.
Challenges in Personalization Implementation
Reaching the last stage is hard and needs full commitment from multiple teams, influencing the company's data and product culture significantly. Success depends on having the necessary technical resources, skilled leaders, and streamlined processes. These qualities grow and improve as you move through the steps.
In this journey, products have evolved from being not personalized to the most personalized stage. Initially, the focus was on collecting and analyzing data to precise models with an automated framework. The approach started as reactive but became refined and optimized as the stages progressed. Data is initially static and processed in real-time in the final stage. The company has moved beyond just analyzing data to deliver highly customized products and services that adapt seamlessly to each user.
Guide to start personalization initiatives
1- Understand Your Customer:
Explore customer insights by closely looking at a range of data—demographics, purchase history, activity events, and communication preferences. Map customer needs and find opportunities within the product to attract, engage, and keep users. For example, a company could use purchase history or analyze activity data to improve user engagement.
2- Segment Your Customer Base:
Improve personalization by tailoring strategies to specific customer groups based on shared characteristics or behaviors. For instance, an e-commerce platform might group customers by shopping habits and demographics, offering customized benefits to users who've bought similar products in the same location. This targeted approach boosts the overall customer experience and increases the chance of conversion.
3- Define Tools and Technological Approach:
Enable your personalization strategy with a strong technological foundation. Invest in tools and systems for efficient data collection, analysis, and personalized experiments. For instance, you could use an A/B test tool to create experiments by segmenting users based on their behavior, setting the test period, success criteria, and statistical relevance, and then you could analyze the results in this tool.
4- Prioritize Main Use Cases and Touchpoints:
Ensure a smooth and personalized customer experience across all touchpoints—website, email, mobile apps, and social media. Start identifying and prioritizing key use cases, and create a plan for organized testing and implementation.
5- Continuous Monitoring and Improvement:
Recognize personalization as an ongoing process by regularly monitoring and analyzing data. Identify areas for improvement and make quick adjustments to refine the personalization strategy. Regularly analyze user feedback, conduct tests, and use analytics to adapt products and services based on customer preferences and market trends.
Investing in personalization is not a trend, it's a strategic advantage that sustains business and delights users. May this article guide you on your personalized journey to success.
References:
Amazing matrix to start ground an implementation.